was budget director for both presidents clinton and obama. he isn't viewed as a skilled and experience capitol hill negotiations but he does not have strong ties to wall street. it is likely he will be confirmed by the senate. the dow jones industrial average broke a two-week losing streak on wednesday. continued to rise through the week. the s&p 500 in fact closed at a new five-year high on thursday. earning season is under way and dow component alcoa picked off, profits were in line at alcoa while revenues were better than analysts expected. wells fargo beat expectations as did american express. apple is said to be considering a cheaper version of the iphone. the iphone5 costs about $200 with a contract with a wireless carrier. the less expensive version would have a plastic body. the debt ceiling, new treasury secretary, will washington be an on stockles to the market and the economy or will washington be a help? joining me now is geg i and

author of "the economist" and jerry webman, chief economist at oppenheimer funds. thanks for joining us. >> hi. >> greg, let me kick this up with you. president obama's pick for treasury secretary, chief of staff, jack lew, will take over for timothy geithner. is this a missed opportunity to be friendly to business, the business community, or is this a new call since it appears that nobody on earth knows this better than mr. lew. >> well, i think jamie dimon would build business between the community which feels a little bit alienated by the administration's first-term policies and mr. obama. but what they got is a guy -- not one of them, but does know the budget really well and the clearly the main challenge on the economic front for the first year is going to be on the fiscal front.

insofar as jack lew has the trust of the president is in power to make deals, i would say that is is a positive. you do have to keep in mind he's not exactly the most trusted or liked person among republican on capitol hill. so that might actually make deal making a little bit rougher. >> jerry, what about all of these issues, you know, in washington. the debt ceiling fight that's on the horizon. is this going to impact the broad economy in the earning season, do you think? >> i guess this whole political thing is these are all the bricks in the wall of worry that equity markets are continuing to climb. you know, we know how to talk about these things, they're out there, in the media a lot. we follow them sometimes like a sport. maybe we exaggerate a little bit how much these political match nations, i don't want to minimize them but i think sometimes we miss the point that there are really good companies out there who figured out how to make really good money with all of this political noise going on. >> and yet, greg, so many potholes ahead.

you know we're going to see a lot of back and forth over raising the debt ceiling, sequestration is still on the horizon now. less than two months away. the continuing resolution. i want you to take a listen to the president's spokesperson this week on the debt ceiling and get your reaction to that. >> sure. >> he will not negotiate with congress when it comes to the essential responsibility of congress to pay the bills that congress has incurred. >> what do you think? >> well, it's an interesting question. how does he not negotiate with congress if congress won't raise it, if the president doesn't do something like cut spending? so it's kind of an awkward sort of situation. and i think the troubling aspect for the markets is you basically have two objects here, republicans who say we won't raise the debt ceiling if you don't cut spending and a president who says, first of all, i'm not going to cut spending unless you also raise taxes and, by the way, i'm not going to negotiate on the debt ceiling. if past is pro log, i don't think the market or the private sector is going to pay attention

to this until the last minute, which means sometimes in the first few weeks of february. >> do you think we will see spending cuts, and by the way, do you think we'll see even higher taxes, greg? >> well, i think we will but i don't think we're going to see it in the form of the grand bargain. i think that kind of both that phrase and that method of doing deals is basically dead. it just doesn't work. the president believes that the speaker of the house of representatives john boehner, he just can't deliver. republicans, there's a deep lack of trust with respect to the administration. my expectation is that you're going to see a lot of muddle through this year. you might see the debt ceiling raised in one-month increments. i think you're going to have to get used to this pervasive patchwork and lack of certainty. >> jerry, i don't know how good that is. listen to what greg is saying. months by month you're going to listen to these important issues. does that meek that business and consumers are going to be in lockdown mode because we don't know what's ahead? >> what greg has just described

is what when i went to graduate school in political science 40 years ago, that's how america makes policy p, it's called incrementalism. look at this deal at the end of last year which absolutely nobody loves and it's the farthest thing from a grand bargain, on the other hand, it takes a few billion dollars out of long-term debt. it's not enough. we'll come up with some other deals and it's nonsense for the president spokesman to say he's not going to compromise. that doesn't mean anything. we're going to see more of this bit and pieces. as you both said, the market and business continue to move along, look for ways to look money, look for opportunities and i think that's going to continue to be the story. don't wait for clarity. act on where there's money to be made now. >> i like, greg, what you wrote in an article for "the economist" recently. markets now live in the policy equivalent of beirut in 1982. what did you mean by that? >> what i'm trying to say is essentially we have the fiscal equivalent of civil war going on all of the time here in

washington. people in beirut got used to the the perpetual violence going on. that's the point that jerry and i are making here. both the private sector and markets have gotten used to this perpetual brinkmanship. there will be a lot more focus on what's happening in the real economy and maybe what the fed might do, whether they're going to bring an early end to qe. >> you're saying looking for opportunities to make money. how would you do it and how would you say it's done so far? >> so far, so good. late last week we heard good numbers from wells fargo. the market didn't like the forward look very much but basically the numbers we saw early on were encouraging. of course, that's because we marked down expectations so sharply. so i think people need to look globally. they need to look at the story that we've heard again, seems to be bubbling back up again about the consumer, the new middle class consumer in emerging markets, china. the idea that china was going to have a hard landing to me was

always just complete nonsense and a misunderstanding of how that economic system was working. and look, the housing story in the u.s. is moving along. yeah, the payroll tax really matters but, in fact, if you look at how much the average homeowner who has been able to refinance and that's more and more of them, have saved, it dwarfs what the increases in the payroll tax. >> all right. we will leave it there. great conversation, guys. appreciate your time tonight. see you soon. greg ip and jerry webman. up next on "on the money," what today's students learn on the economy and what we can teach yourself for the future. the president of harvard university is with me. and buzz with millions, how to build a news company in a new age. age. how it may just save journalism. lucky charms?!

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joining me now is drew faust, harvard president. >> great to be here. >> we had news this week from m moody's. the demand for four-year college degrees is going down, it is softening. it is softening. leading to declines in net revenue for many universities. now, i realize harvard really is in a unique position. but tell me what you see broadly speaking out there in terms of the demand, in terms of the numbers of students coming in to four-year colleges, and even higher education. >> well, harvard does still have this very high level of demand, and our applications are up again this year for the college. but you're right, on a broader nationwide basis, we're seeing a softening in that demand as moody's just reported. i think this is something the country should be worried about, because we're in a moment in human history where knowledge is evermore important as a foundation for economic growth, for social mobility, for building the kind of society and nation that we want to be.

and so we have to make sure that access to higher education remains open to individuals who can benefit from it and make contributions to our country and to the world. we at harvard have worked very hard to making a cess open to students of talent. and i think part of the reason for our high numbers of applications is our very generous financial aid policy. which has been revolutionized in the past decade, so 60% of our students are on financial aid. we ask no family contribution for families that make less than $65,000 a year. we want that to deliver a message that if you are a person of talent and aspiration, you should think about coming to harva harvard. >> what is your take on online? i know harvard and m.i.t. joined forces on edex, offering online courses to a broad population. what are your expectations? 200,000 people have signed up. >> we had 200,000 -- for the

first two quarters. >> first two quarters. >> that's ter whiff fik. >> very good. >> what are your expectations here? >> our expectations here are that digital opportunities are going to transform what higher education can be in a variety of ways. they're going to make our knowledge available much more broadly. we had many thousands of these individuals who signed up, about 70% of them, in fact, were from outside the united states. so this made harvard ideas, harvard teaching available around the world. but we also want to use these experiments with online education to help us understand what we might do better in our own classrooms here in the united states and here at harvard in particular. we want to see are there ways we can bend the cost curve using some digital elements in higher education, are there anyways of teach that enable more active learning on the part of students? how do we use the face-to-face in different ways when we also have the digital available? so this is an experiment in

transformation, what we believe will be a transformation of higher education in its accessibility but also in how it is undertaken in face-to-face interactions, as well. >> what about students? what are you hearing from students today? where are the jobs? where do they want to work? what are their hopes and dreams once they leave harvard? >> well, there is a very interesting poll that was taken by our undergraduate newspaper at the end of the academic year last year asking students about to graduate what most of them were doing and what they wished they were doing. and the job mentioned of those going into the workforce, some were going off to graduate school and law school and medical school, but those going into the workforce, the job most identified as the one they were going to pursue in the immediate term was something in financial services or consulting. but when students were asked what they wished they were going to do, the highest answer was a

career in the arts. and i find that so interesting. i think it speaks the spirit of creativity, of innovation that we see in the arts, in engineering which is ground dramatically at harvard, students who wanted to go in the arts haven't quite figured out how to do it. i find that intriguing. >> i want to ask you one more question because i know you're a civil war scholar. what do you make of the at tension steven spielberg's film "lincoln" has been getting? obviously we're in political season and ahead of the award season. >> i think it's a wonderful film and i was delighted to see all the nominations announced for it. i think the film does many things, but one thing it says to me is what an appetite there is and how broad an appetite there is for serious ideas and for thought and for history which, of course, is very dear to me. i think it's also a film in which we project our current

concerns on to the past. and we ask questions about what does leadership mean, how does our government work, what does it take to move the nation in a direction that's a positive direction, and how do ideals interact with practicalities. and there's some wonderful messages in that film act that. >> fascinating. great film. president faust, great to have you on the program. good to see you. up next we're "on the money," was president obama re-elected because he won the internet? why buzz is what ron's politics in the press. as we take a break, take a look at how the stock market ended the week. back in a moment. oh!

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each and every year the hottest handheld device is introduced at the consumer electronics show in vegas, event long thought of as the super bowl of new technology. but my next guest say that may not be relevant to the way technology is actually being used today. from viral content website buzzfeed, jonah peretti and editor in chief ben smith. your headline on this was, why we're not at the biggest tech show in the world, even though, john, actually there were pick sure of you there on twitter. but the editorial wasn't there. okay. so tell me about this.

how has the technology landscape changed and how buzzfeed fits into that. >> right, both in our coverage and in the shape of the landscape, basically bats what's happened is people care less and less about the box or the gadget on which they're looking at the content and more and more about what's in there and particularly about the apps and social blat forms. >> 40 million unique visitors to the site each month. as a media company what are you trying to build? tell us what your vision is. >> we're focused on building a media brand for the social age, so for us, we think that when people think content is interesting enough to share with their friends, that's a much higher bar than a click or a slide show view. we want people to find the best stuff that they think is worthy of sharing with their friends on twitter, on facebook, on the social web. >> and a lot of viral content on buzzfeed, ben, is things like

cat pictures, top ten lists. talk to us about what gets eyeballs to the site. how do you goofier content in some regard with real journalism, breaking news and more serious content? >> i think most people like us and i think there's a resistance in traditional news organizations of jamming them up next to each other, having cute cats next to broken news on the departure of the secretary of labor, say. and i think that's t. thing that's changed if you're spending your life on fwiter, spending your time on facebook, if you're on twitter you're accustomed to those things being jammed together with your friends and the idea that they have to be kept separate somehow isn't how we experience news anymore. >> how about your news diet, what is that? how do you consume information? what do you look at? >> i really get minus from twitter. >> you do? >> when i wake up in the morning that's what i scroll. when jonah convinced me to

buzzfeed, this seemed crazy but this is the social web is where i'm already consume by news and when i break a story i want to see it, get retweet tweeted and retweeted. >> and the set of people 25 and under, 30 years old and under, they're twice as likely to get these news from these kinds of outlets, social media. what about trusting that information? how do i know that this stuff is actually accurate and does haven't the weight and strength of a traditional broadcaster behind them? >> yeah, well, i think that people are brought more into the process of how the truth is worked out or discovediscovered. so you will see a news story break and information on twitter that is not accurate and immediately it gets corrected by people say, no, i have another source and i found this and i found that. and everyone swarms to try to figure out the truth, which sometimes is confusing to the public because there's one or two tweets that get retweeted a lot that are wrong and there's a flood of correction that comes down and the public actually sees that unfold and doesn't

wait until the evening news to get the truth told to them. >> getting into the ebook publishing business as well. michael hasting's book at the 2012 campaign coming out this week. talk about that. any relation with the president understanding the digital world as well as he does? >> really it was op for tunistic, in that he was covering the obama campaign for us and doing amazing work and having an incredible romp. we discovered reading the book that we may have paid for him to drink out of mini bars and, you know, or not just destroy mini bars and like five different hotel on the campaign trail, which, you know, was an entertaining reading. >> good story. >> and because these information-based industries li publishing, entertainment, news, are increasingly moving online and increasingly becoming social, it felt like a great first step to say let's take a book from one of our writers who

is doing great work and release it online and promote the book in a way that works for the social web and for the readers that are reading on their kindles and their ipads. >> really great stuff. we will continue following. thank you very much, gentlemen. buzzfeed, we love it and thank you for joining us today. ben smith and jonah peretti. up next on the "on the money," what will have an impact on your money and a pasta dish that will take a bite out of your wallet. further proof, yep, there is no prelunch. back in a moment.

here's the stories coming up in the week ahead. earnings reports are out from banks, jpmorgan chase, bank of america, goldman sachs and citi, as well as ebay, intel, and general electric earnings for the fourth quarter will hit. tuesday, what's on your mind? facebook, the social networking site sent invitations to a serious public events rumored to be a new product announcement. also on tuesday we will get december's total retail sales numbers. that includes the holiday shopping season as well as inflation reports, the indicator for the producer price index will be out. on wednesday, the consumers price index follows the ppi. finally today, check please. manhattan's beach a restaurant is serving a plate of past a that sells for, get this,

$2,013. it's topped with fresh lobster and black truffle shavings and diners can take home the gold leaf plate designed by none other than i don't know any versachi. talk about a lux lunch. that will do it for us for today. thank you so much for being with p me, my guests, next week, whole food founder john maccay. keep it right here where we are "on the money." have a great week, everybody. i'll see you next weekend. as a mom, you spend a lot of time helping others. hamburger helper can help you back.

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>> now on "extra" -- duck and cover. are the oscars ready for seth macfarlane? >> congratulations. you five ladies no longer have to be attract todd harvey weinstein. >> i'm here with the new oscar host, seth macfarlane. >> this is a family show. >> who was shut out? "extra" picks the golden globes. >> i'll go with best film of the year. >> we're revealing the races too close to call and the stars can't -- who can't lose. and the interview with arnold. >> i've got a surprise message from sly stallone. >> then, a.j. in palm beach at the donald's estate. why he's going on a crash diet. lance armstrong sitting down with oprah to admi